• General overview
  • Principles and legal framework governing the investments in Algeria
  • Institutional framework
  • Guarantees granted to investors
  • New features introduced since 2009

General overview

“Freedom to invest", "non-discrimination", "investment protection" and "intangibility of benefits” are the main principles governing investments in Algeria.
As part of the different economic development programmes established since 2001, Algeria has launched a strategy to grow its economy with the specific aim of improving the competitiveness of its national commerce.

The key aspects of this economic policy ― based primarily on developing investments, upgrading businesses, regulating industry activities, and the privatisation and redeployment of the economic sector ― aim to bring about a structural transformation of the economy in order to adapt to the changes brought about by economic globalisation. At the same time, it should enable the country to close the gap in terms of its infrastructure, particularly in the transport sector.

The country's diverse and rich potentialities, the encouraging framework and the multiple incentives, described below, are one of reasons why to invest in Algeria. There are therefore enormous opportunities on offer to foreign investors interested in intervening in the country in a number of sectors (industry, agriculture, fishing and aquaculture, telecommunications, public works, improvement of the public sector and transport).

Foreign investment is required to improve national production in order to, on the one hand, reduce the number of imports, and on the other hand, diversify national exports. To this end, foreign investors are expected to facilitate a transfer of technology, in particular the distribution of new technologies and the development of managerial capacities.

Principles and legal framework governing the investments in Algeria

Investment in Algeria is governed by a number of principles, these being: the freedom to invest, non-discrimination, the protection of investments and the intangibility of benefits.

The legal and regulatory framework in force in Algeria encourages investments and promotes the development of the private sector. It allows any natural person or legal entity, national or foreign, to invest in economic activities pertaining to the production of goods and services, as well as investments made within the framework of awarding concessions and/or licences.

The majority of the legal framework on investment in Algeria is contained within regulation 01-03 of 20 August 2001 on the development of investment, and supplemented by regulation 06-08 of 15 July 2006.

In changing the previous legislation, the regulation of 15 July 2006 established the key points of the revision of the legal framework on the promotion of investment with a view to moving towards the best international practices.

In addition, measures have been taken in relation to foreign investors in order to improve the business environment and minimise the delays and costs associated with setting up and starting new businesses (simplifying and shortening of procedures, clarifying of competencies...).

Institutional framework

A number of organisations have been set up to determine the nature of foreign investment and to support it. Thus, the investment competencies are clarified and organized into three levels:

  • A strategic level represented by the National Investment Council (CNI). This Council takes the decisions relating to some very big investments and examines portfolios of a special interest for the economy ;
  • A political level represented by the Ministry for Industry and Mining (MIM) is in charge of drafting the national investment policy and ensuring its application. It carries out its tasks through the General Investment Administration (DGI) ; and
  • An executional level represented by two agencies which perform their tasks under the control and orientation of the MIM :  
    1. The National Agency for Investment Development (ANDI) ; and 
    2. The National Agency for Intermediation and Property Regulation (ANIREF).

Furthermore, this new framework has strengthened the protection of the rights of investors in so far as the right to appeal, until then limited to a few acts of the ANDI, has been extended to include all acts related to the rendering of the decision to grant incentives made by all the organisations concerned. An Investment Appeals Commission was set up on 9 October 2006 within the Ministry in charge of Investment (Executive Decree No. 06-357).

The guarantees granted to investors

Algerian legislation on investment provides essential guarantees to investors, in particular :

  • non-discrimination in relation to Algerian natural persons or legal entities;
  • legal security/intangibility of the law: future revisions of or repeals to legislation on investment do not apply to projects undertaken in the framework of the legislation in force at the time of the investment, unless the investor expressly requests it;
  • settlement of disputes: any dispute between the foreign investor and the Algerian State resulting from an act of the investor or a measure taken by the Algerian State against the investor will be presented to the competent jurisdictions, unless multilateral and international conventions and agreements legally binding for Algeria concerning conciliation and arbitration or a specific agreement contain an arbitration clause or allow the parties to reach a compromise through ad hoc arbitration.

Furthermore, the process for granting benefits has been simplified. The prior compliance check previously conducted by the ANDI has been replaced by a simple verification of the admissibility of the portfolio presented by the investor. The check for observance of investor commitments will be directly conducted by the Tax and customs administration and carried out a posteriori.

New features introduced since 2009

The 2009 Complementary Finance Act (LFC) introduced the 51-49% law, under which the Algerian partner or partners should retain at least 51% of the share capital compared to, at most, 49% for the foreign operator in all investment projects. Nevertheless, the latter can be the majority shareholder if he is an associate of several Algerian operators who share the 51%, in the same way as he may be responsible for managing the company or project.

Despite this measure being criticised by foreign firms, the number of projects put forward by foreign partners tripled in 2010 compared with 2009 and tripled in 2011 compared to 2010. Furthermore, a number of foreign operators who have come to Algeria have said that they are satisfied with the business climate in the country, regardless of this new requirement.

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